The Berkeley Rent Board Mailbag

Exemptions


Q: I'm a tenant in a building that is being converted to condominiums. Since I cannot afford to buy my unit, will I need to vacate once the conversion has been completed? Is it true that condominiums are exempt from rent control? (May 2006)

A conversion to condominium has a number of implications for both owners and tenants. However, under the condo conversion ordinance amended by the City Council in October 2005, many protections exist for tenants. First, tenants may not be evicted from a unit due to a conversion to condominium. In fact, all sitting tenants are allowed to remain in the unit with a regulated rent tied to the increase in the Consumer Price Index. Furthermore, tenants may only be evicted for a "good cause"-nonpayment of rent, violation of the lease, and ongoing disturbance of other occupants are examples of good cause for eviction. For units converted to condo after October 2005, owners may not evict a sitting tenant in order to owner-occupy the unit. To address your question regarding condos being exempt from rent control: A rented condominium is exempt from rent control only if it has been rented out after being bought by a new owner after conversion. However, eviction and security deposit protections still exist even for rented condos. As noted above, for sitting tenants in units that were converted to condominium after October 2005, rents must be limited to annual increases equal to 65% of the increase in CPI.


Q: I began renting a single family home last year and my lease expires at the end of June. My landlord just gave me a notice that the rent will be increasing July 1 by 15%.  Can he do that?  (June 2004)

Single-family homes rented after 1/1/96 are exempt from rent control; therefore, the landlord may increase your rent once your lease expires. However, if the rent increase is more than 10%, CA Civil Code section 827 requires that he give you a 60-day notice before the increase can go into effect (30 days' notice is required for increases of 10% or less).


Q: My elderly mother just moved out of the house she owned and lived in for 25 years and has asked me to help her rent it out. Do I need to register it with the Rent Board? (February 2003)

If there is only one unit on the property, that is, it has no additional unit like an in-law or a cottage, the house is considered a single-family dwelling (even if isn't occupied by a family) under state law, and is exempt from rent ceilings and registration requirements. An exception to this rule is if the house has more than four bedrooms, and you rent each bedroom to an individual tenant under a separate lease, it is considered a rooming house under Rent Board regulations, and each room must be separately registered. But if you rent the house as a whole, no reporting to the Rent Board or payment of fees is required. However, two sections of the Rent Ordinance still apply to single-family homes: interest must be paid annually on security deposits and there must be good cause for eviction.


Q: I own my home in Berkeley, and I would like to share it with a roommate. Will I have trouble getting rid of the roommate if things don't work out?  (September 2002.)

A landlord who is at least a 50% owner of a property that he or she occupies as a principal residence, and who shares a kitchen or bathroom with a tenant, is not subject to the Berkeley Rent Ordinance. If you meet those criteria, you do not need good cause to evict a tenant. You are still bound by state law, however, so if you have a month-to-month agreement with your tenant, he or she will be entitled to a 30-day written notice to leave. 


Q: I live in a house that is divided into five apartments, but only four are registered. My unit, the attic unit, is not registered. Does that mean my landlord is out of compliance for not reporting my unit?  (July 2002)

Not necessarily. If your unit was created by converting uninhabitable space into habitable space after June 30, 1980, the Rent Board considers it "new construction." (See Berkeley Municipal Code section 13.76.050 I.) Newly constructed units, including attics, basements, and garages that were converted into living space after that date are exempt from the registration and rent ceiling requirements of the Rent Ordinance (but the security deposit and good cause for eviction provisions still apply). If you discover that the attic was used as living space before 1980, then your apartment should be registered with the Rent Board.


Q: I heard that condominiums are no longer exempt from rent control. Is this true?  (July 2002)

It's true in certain circumstances. The Costa-Hawkins Act exempted most condominiums from rent control. An amendment to that state law, which went into effect January 1, 2002, says that units that were subject to rent control and are converted into condos, but not sold separately to a "bona fide purchaser for value," are still regulated by the Rent Ordinance if they are rented. In other words, if the same person owns the unit before and after it is converted, or if the owner merely transfers the property to, say, a relative for a token sum, then the unit is still subject to rent control. This amendment is designed to prevent owners from exempting units in rent-controlled jurisdictions merely by changing the form of ownership. Units that are converted into condos and then sold to a legitimate buyer, however, are exempt from the registration and rent ceiling requirements of the Rent Ordinance, but are still governed by the security deposit and good cause for eviction provisions of the Rent Ordinance.


Q:  I am interested in buying a house that has an in-law unit on the property. My realtor says it's a "golden duplex" and therefore not subject to rent control. What exactly is a golden duplex and why would it not be under rent control?

First, for Rent Board purposes, a duplex is any two-unit property. Some duplexes are exempt from rent control, or "golden," while others are not. A duplex is exempt from rent control if an owner lived in one of the units as his or her principal residence on December 31, 1979 and an owner currently occupies one of the units as his or her principal residence (it need not be the same owner). "Owner" in this context means an owner of record with at least a 50 percent interest in the property.
The rationale for this exemption from rent control is the belief that an owner who shares a small property with a tenant will have a more familial relationship with his tenant and, therefore, there is less need for external rules to protect the tenant from unwarranted rent increases.

So, why aren't all owner-occupied duplexes exempt? The exemption is limited to two-unit properties that were owner-occupied on December 31, 1979 to protect tenants living in non-owner-occupied duplexes. If any duplex would become exempt by virtue of an owner residing on site, it is likely that every duplex in Berkeley would eventually be owner-occupied because of the financial benefit that comes with owning a rental unit with an unregulated rent. Such a broad exemption would effectively remove a significant number of units from the rental market and displace hundreds of renters. Therefore, to preserve the composition of the rental market, the exemption is limited to current owner-occupied duplexes that were owner-occupied at the beginning of rent control.


Q:  I live in a duplex. Both units have been rented since 1979. The property was recently sold, and my new landlords moved into the other unit. I'm already paying the rent ceiling, but they just gave me a $150.00 rent increase. Can they do this?

No. Some landlords mistakenly believe that if they own a duplex and live in one unit that the property automatically qualifies for the owner-occupied duplex exemption provided in Section 5 of the Rent Stabilization Ordinance. This is not the case. The rental unit in a two-unit property is only exempt from rent controls if an owner of record holding at least a 50% interest in the property resides in one unit AND the property would have qualified for the exemption on December 31, 1979. In other words, an owner with a 50% interest in the property needed to live in one of the units in 1979. Here, since both units were rented on December 31, 1979, the property does not qualify for the owner-occupied duplex exemption. Therefore, since you are already paying the rent ceiling, the landlords cannot legally raise your rent.


Q:  I am considering purchasing an old, commercial, 11-unit building in Berkeley that has never been zoned for residential use and converting the units to live/work spaces.  Is it true that live/work spaces are partially exempt from rent control restrictions in Berkeley?  To be frank, this project will not work financially if the units are not exempt from rent control.

As a rule, live/work units are completely covered by the Berkeley Rent Stabilization Ordinance.  However, rental units that were created since the adoption of the Ordinance in June 1980 are exempt from the rent ceiling provisions of the Ordinance as "new construction."  Commercial space that is converted to residential use after June 1980 is also considered new construction.  You should know that there is vacancy decontrol in Berkeley.  Under vacancy decontrol, a landlord may set a unit=s rent at market level following a voluntary vacancy.  The only advantage of a new construction exemption is the unrestricted ability to raise the rent on a sitting tenant.


Q:  I live in a duplex.  My landlord just told me that he is going to raise my rent by $100.  Isn’t there some law to protect us from such a large increase?

It depends on whether your unit is subject to the Rent Stabilization Ordinance.  If your landlord has a 50% or greater interest in the property and lives in the other unit in the duplex, and one of the units was owner–occupied on December 31, 1979, your unit is exempt from the Ordinance.  In that case, your landlord may impose any increase he or she chooses after 30 days written notice, unless you have a fixed term lease that limits rent increases.  If you have a fixed term lease that limits the amount the landlord can charge, your rent cannot be raised until the end of the lease period.  If, however, your unit is subject to the Ordinance, the landlord could not impose a rent increase that results in a rent greater than the Ordinance rent ceiling.  To find our whether your unit is exempt, call, e-mail or visit the Rent Board.


Q:  If our unit is not under rent control, are we allowed to ask the tenants to pay sewer charges?

Yes, if the unit is exempt from the Ordinance, you are free to include sewer fees in the rent.


Have a question?  E-mail us at rent@ci.berkeley.ca.us